The European Central Bank: Decision Rules and Macroeconomic Performance

Yunus Aksoy (), Paul De Grauwe and Hans Dewachter

No 2067, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In this paper we analyse the effects of different decision rules in the ECB on monetary stability. We consider a model where asymmetric shocks and divergent propagation of shocks on output and inflation are potential causes of tensions within the ECB concerning the conduct of monetary (interest rate) policy. Given divergence of desired interest rates (due to the asymmetries) we analyse the effect of different voting procedures within the Governing Council of the ECB. Welfare implications are discussed.

Keywords: EMU; linear feedback rules; monetary stability (search for similar items in EconPapers)
JEL-codes: F33 F36 F42 (search for similar items in EconPapers)
Date: Written 1999-02
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